Income growth, ethnic polarization, and political risk: Evidence from international oil price shocks

Markus Brückner, Mark Gradstein

Research output: Contribution to journalArticlepeer-review

18 Scopus citations

Abstract

This paper studies the effects of growth in countries' national incomes on political risk. To address causality, we use the annual growth rate of the international oil price weighted with countries' average oil net-export GDP shares as an instrument for national income growth. Our instrumental variables analysis yields two main results: (i) income growth has on average a significant negative effect on countries' political risk; (ii) the marginal effect of income growth on political risk is significantly decreasing in cross-country differences in ethnic polarization, so much so that at high levels of ethnic polarization income growth increases political risk while at low levels of ethnic polarization income growth reduces political risk.

Original languageEnglish
Pages (from-to)575-594
Number of pages20
JournalJournal of Comparative Economics
Volume43
Issue number3
DOIs
StatePublished - 1 Aug 2015

Keywords

  • Ethnic polarization
  • Income growth
  • O11
  • Political risk

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Income growth, ethnic polarization, and political risk: Evidence from international oil price shocks'. Together they form a unique fingerprint.

Cite this